>> when nixon did it, do you think he felt that he would manage to calm the right down? or it was a price he was willing to pay? >> it was a price he was willing to pay. >> this was the week that changed the world. >> richard nixon said when he went to china with you of course in '72, the week he was there, he said this is the week that changed the world. >> he was right. >> well those were some of the tough decisions we wanted to analyze. do you agree with the choices these people made? what are the toughest decisions you have made? join in the conversation online. #toughdecisions on twitter. we'll highlight the most interesting ones on our website. thank you for joining us tonight. we hope your decision to watch our show was not a tough one. >> you are in the cnn news room,

i'm martin savidge, in this weekend for fredricka witfield. this hour and throughout the day we're following breaking developments on a story that affects every single american. yes i'm talking about the fiscal cliff. hello, good to be with you. we are just two days now remaining that is, until the countdown clock and the pressure is mounting on lawmakers to get a deal done. both houses of congress are back in session this sunday ready to vote on a plan that senate leaders are trying to hammer out right now. if a deal isn't reached, your taxes will go up and government spending will be slashed. dana bash and jessica yellin are covering all angles of the story. let's start with dana on capitol hill who has heard word of a setback in the talks. dana, what do you know? >> setback from the perspective of democrats. we should underscore that.

this is any information that is coming out. is coming out for a purpose. this is certainly significant. when it comes to the democrats' perspective. and that is, they are very unhappy and they call a quote poison pill. what they say is an offer from the republicans to include in this deal, which has been from the democrats perspective, mostly focused on taxes to include in it, a change in a technical way that social security is done. what it effectively would mean is that social security recipients would get smaller checks each month. something that the president himself did offer as part of a larger deal when he was in those talks with the house speaker. and ha democrats would say is we're past that. we're not in the larger negotiations any more. this is a scaled-back negotiation and they do not want anything relating to entitlements, especially social security, involved in this. so this democratic source says again that this is a poison pill. it is a major setback. i was told by another source that mcconnell offered this last

night. and that the democrats formally rejected it about an hour ago. this is important because the good news is we weren't hearing a lot of details. it definitely could be a employ and it probably is part of a employ to make republicans understand they're serious. they mean it, the democrats, when they say they're not going to go for this. what the technical term is chain cpi. they're not going to go for it. but if it is not that, if it is really genuine and the republicans won't back down on this. then it could be a very, very bad omen for getting this kind of deal. because we only really have hours to go. >> well, let's talk about that the timeline here. if a deal isn't reached today, they could hold a vote tomorrow, could we see this possibly dragging on to new year's day? >> possibly. but the plan as far as senate democrats go and they're in charge of the senate is as

follows. if this setback isn't fixed over the next few hours, then what senate democrats plan to do by this evening is to put a fallback plan on the senate floor. and the fallback plan would include really just a focus on tax issues. for example, mostly tax issues. what the president campaigned on for two campaigns, letting the tax rates, which expire for everybody, tomorrow night, just letting them expire for incomes over 250,000. they would also fix the amt, which many americans know what it is, from doing their taxes, they would patch it. they would also fix a big problem for people who are medicare recipients, in that doctors would get a lower amount of money from the government, which would make a lot of doctors say i'm not giving medicare patients any business. they're going to try to fix that and extend unemployment benefits. that's the fallback position

that the democrats say they'll put on the floor if they can't fix the setback and get to the other deal they're working on with the republicans as we speak. >> dana bash talking to us from capitol hill. let's go now to jessica yellen in washington, thee has been following things at the white house. jessica, is president obama taking a role in these talks on a day-to-day basis or is he staying on the sidelines today in. >> hi, martin. the white house and the negotiators at the white house have been in contact and are you know, they say the lines of communication are open. but the work is really happening between negotiators on the senate side. and you know, work gets done more effectively, frankly when they are able to trade deal points between themselves. and what you're seeing right now is, is the sort of bartering that has to happen before the president can sort of weigh in and the white house can sort of play its role. and this is how washington works most effectively.

if chain cpi were part of the deal, i don't think that that's something that the white house would accept that is something as dana said, is part of a bigger deal. not something that they're going to be happy with if it's part of a small deal. but obviously this is the bartering that goes on in basic contract negotiations, it's what you see. they're posturing right now and as the clock ticks down you would expect something like that. when the president was on meet the press, he nad clear we're in the position right now where one of two things is going to happen. here's how the president put it. >> i'm confident that one of two things is going to happen when it comes to the fiscal cliff. number one, we're going to see an agreement in the next 48 hours, in which case, middle class taxes will not go up. if that doesn't happen, then democrats in the senate will put a bill on the floor of the senate, and republicans will have to decide if they're going to block it. which will mean that middle class taxes do go up. i don't think they would want to do it politically.

but they may end up doing it. >> the one point i would make, finally martin, is that the president's fallback alternative i would say is less a real fallback measure. because we know republicans are likely to block it. it's more of a political measure for democrats to try to shift the blame of responsibility on to republicans. before the nation goes over the clip. >> jessica yellin, following things from the white house perspective, thank you very much. we'll check back in with you later. the fiscal cliff isn't the only pressing legislation that's on congress's plate. there's also something called the farm bill. republicans opposed a measure passed by senate in june. saying it cost too much. if congress doesn't act, dairy farmers among others would no longer have a government safety net for prices and the cost of a gallon of milk could soar. here's agriculture secretary tom vilsack had to say on the state of the union. >> if you like anything made with milk you're going to be

impacted by the fact that there's no farm bill. if if there is not an extension of the existing bill or a new bill basically on january 1st or shortly thereafter, permanent agricultural law goes into effect, which means the federal government will go back into the business of strongly supporting the dairy industry by raising the price support if you will or support for dairy products to $38 a double weight, almost twice what the price is today. >> vilsack says that the agricultural exports and farming families will also be affected if a farm bill is not passed. to the senate floor. mick mcconnell is speaking. >> vice president to see if he could help jump-start the negotiations on his side. the vice president and i have worked together on seclusions before and i believe we can again. i want my colleagues to know that we'll keep everyone updated, the consequences of this are too high for the

american people to be engaged in a political messaging campaign. i'm interested in getting a result here. i was here all day yesterday, as i indicated we submitted our latest proposal at 7:00 p.m. last night. we're willing to work with whoever, whoever can help. there's no single issue that remains an impossible sticking point. the sticking point appears to be a willingness, an interest or frankly the courage to close the deal. i want everyone to know i'm willing to get this done. but i need a dance partner. >> mr. president? >> later. >> we have been. >> now we've got the senate majority leader, harry reid speaking in rebuttal. >> we did have conversations last night that ended late in

the evening. between staffs. this morning, we've been trying to come up with some counteroffer to my friend's proposal. we've been unable to do that. i've had a number of conversations with the president and at this stage we're not able to make a counteroffer. the republican leaders told me, and he just said here that he's working with the vice president and he and the vice president, i wish them well. in the meantime, i will continue to try to come up with something. but at this stage, i don't have a counteroffer to make. perhaps as the day wears on i will be able to. i will say this. i think that the republican leader has shown absolutely good faith in just that we're a part on some pretty big issues.

>> that was harry reid, the senate majority leader representing the democratic side of things. from the sound of both men, it appears that they are at an impasse. and certainly not optimistic when it comes to trying to reach any kind of any negotiated settlement right now. 6 we'll continue to listen in here. >> who yields time? i want to bring in dana bash. does it sound like they've broken off all talks. they've said, okay, that's it, i've made my proposal, you've made yours, we're too far apart. >> i wouldn't say they've broken off all talks. but what i will say is that this is very, very bad news, a very bad sign. as you and i talked about at the top of the hour, it is, it is good news or a good sign when we don't, we in the media don't hear a lot of what's going on in private. when either side decides to come

out and say that there is a major setback or there is a big problem, that's a big red flag. the fact is that the republican leader came out and he said he wants to dance. close to a deal. he just needs a dance partner. as we reported at the beginning of the hour, democrats feel that one of the things that democrats are offering is a nonstarter from his perspective. is that an offer to change the way technically social security recipients get their money or effectively would make social security checks for every recipient lower each month. that is something that the president offered as part of larger negotiations for a big grand bargain or part of a bigger deal. but democrats say that's not in the cards right now for this smaller deal so it is not a good sign at all. >> what's going do happen next

is that in about 45 minutes, in the floor underneath me. the republicans and the senate are going to get together. the democrats in the senate are going to get together. they're going to talk. and each of the parties' rank and file will get more information about where the parties stand in the talks and i think we'll get a better sense of if they're going to keep talking throughout the afternoon or go to the fallback plan that i talked about and as jessica mentioned, the fallback plan might mean no plan at all. it might be hard to get enough republicans to vote for that in the senate, never mind the house. we'll see what happens in the next hour. >> the next is not good. it appears for nous, the talks to avoid the fiscal cliff have run into some major road blocs. but those discussions will continue on some level. republicans and democrats as we know are playing chicken with the economy as the if is cal cliff approaches. we'll get a.b. stoddard's take

as the clock ticks down. and people are already talking about who they want to be the next president. just who are you voting for in 2016? we've got the answer. [ male announcer ] this december, remember you can stay in and like something ♪ or you can get out there with your family and actually like something. ♪ the lexus december to remember sales event is on offering some of our best values of the year. this is the pursuit of perfection.

let's say you want to get ahead how do you get from here... to here? at university of phoenix we're moving career planning forward so you can start figuring that out sooner. ln fact, by thinking about where want your education to lead, while you're still in school, you might find the best route... leads somewhere you weren't even looking. let's get to work. many americans are waiting for lawmakers to reach a deal to

keep our government from going over the fiscal cliff. with time running out, we've learned of a major setback between republican and democratic lawmakers. we want to bring in candy crowley in washington, anchor of "the state of the union." i know you had a busy morning, talking to eight lawmakers and they couldn't agree onning they, could they? >> they couldn't. we had one panel, two republicans, two democrats from both the house and the senate. and even to get them to talk about whether something was going to pass or not, produced a sort of policy dispute on who had offered spending cuts, who hadn't offered spending cuts. you know, who should pay more in their tax rate, et cetera, et cetera. so it was a pretty good indication of why they haven't been able to get a deal so far. i have to tell you this was prior to the latest setback as it's being called. there was some optimism. saying most people will keep their tax rates, they shouldn't worry about it. what there was a difference of

opinion on, was weather that would happen before the 31st of january. there were a number of people who thought the deadline might slip that it wouldn't harm most people in the sense that their taxes aren't going to go up right away, anyway. and basically, the with holding is still set at the old rate. so there was optimism, but you kind of wonder. is it going like this. i don't know if there's any more. there was this morning but now we seem hung up on whether to change the way that cost of living increases are computed for social security recipients. >> and this breakdown or setback, do you see this as a strategy on somebody's part. 0-door think it's a legitimate indication that the wheels are coming off the negotiation process? >> i don't know that but i know that when you talk to republicans today, thematically, what they were talking about was where are the spending cuts here? you're asking us to raise taxes,

but in this minimalist package, there's not a spending cut. they took the president to task. senator corker said the president hasn't offered this trillion-dollar spending cuts. if he had, we'd be on the floor. there's a dispute about even whether or not the president has offered any more spending cuts. it does not surprise me that one of the things that republicans are now saying is, let's begin to cut these entitlements programs. and one of them obviously is social security. on the other hand, we see progressives and a lot of groups that help the president get re-elected saying, wait a second, there is no need to touch any entitlements. not social security, not medicare, not medicaid. there's no need to touch it. we won the election, hold firm. so you're beginning to see that within the democratic party, the president has sort of spoken favorably about the social security fix. it was part of a broader package. but he's talked favorably about it. some democrats don't want to do

that. while we've seen these rifts in the republican party. about whether to raise taxes, tax rates on anybody. you're going to begin to see this conversation as the conversation moves forward. the rifts in the democratic party about what programs should be cut and what programs should be saved. and i think that's a little of what you're seeing now. i don't know if it's enough to sort of throw the whole deal out. i think only those folks -- you did hear the folks, senator mcconnell saying i've called my friend joe biden, can he get to the president. it's clear that the democrats are saying that the president is the one who won't -- you know, who doesn't want to put up a counteroffer. so we'll see. >> changes by the hour. >> candy crowley, thank you as always, we'll be in touch. >> all eyes continue to be in washington as the cliff gets closer, the president insists 0 a tax hike for the rich.

but the republicans won't budge. something has got to give. a.b. stoddard weighs in. [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro.

but since i've been on alli, am i on this one? nope. am i on this one? no, no, no, no, no. i am on this one. [ male announcer ] for every 2 pounds you lose through diet and exercise alli can help you lose one more by blocking some of the fat you eat. simple. effective. belt-friendly. let's fight fat with alli. have a healthier holiday at letsfightholidayfat.com. have a healthier holiday restore revive rejuvenate rebuild rebuild rebuild

as republicans and democrats play brinkmanship with the fiscal cliff. one gop senator is throwing gasoline on the fire, wyoming's john barrasso said quote that the president is doing nothing about the addiction that he has toward spending. let's bring in a.d. stoddard to get her perspective. let's start off by saying what we've heard, the setback, tounder state it, it doesn't sound good, does it? >> no, it doesn't. but this kind of thing does happen a lot towards the end. et cetera always darkest before the dawn and deals have been saved from the rubble like this before. i think that what you're seeing from the republican side is what candy was talking about.

previously, a desperate need to be able to find something that they can tell their constituents they supported in terms of cuts. >> it's lot of money to get the unemployment checks going again. to fix the medicare, which is going to raise, cut their pay by almost 30%. a lot of money needs to be found. even as they, to tax some wealthy at the top brackets, there's not enough money in the pot. so there's a scramble to be able to have republicans vote for a tax hike and be able to say they voted for some cuts as well. >> right it seems that the president has been very skillful in this argument here that he sort of focused all the attention on taxes and given the impression that republicans are oppose the only to preventing taxes from being raised on the wealthy. but in fact there's a lot more that they're opposed to. it's trying to cut the deficit. >> right, the cuts that everyone

is talking about that are in the sequester, those have already been decided and those are in the bank, but as you lk to change current law, the tax cuts expire tomorrow. to replace a bunch of them, to find new revenue and then not continue to cut does not get us out of our hole. so that's the problem. is we're looking at a very small band aid that doesn't get us through the next hurdlhurdle. it keeps us as a fiscal precipice that we've been trying to get out of for 17 months. >> you heard the words used by mitch mcconnell and harry reid, do you see this as a breakdown? or is it just more brinksmanship? >> as you know, even the most distant viewer observer far away from washington would know that these are never resolved before the absolute last-minute. so to get anything resolved today would be surprising.

i think people are pushing on both sides of the bargaining table. asking for a little more, a little more. there's going to have to be more budgeting. but it is a good sign as was mentioned before. that the vice president is going to get involved. i think you see an earnest effort on behalf of the republican leader, senator mitch mcconnell saying i really want to do something. i was here yesterday, i'm looking for a dance partner, even saying he and joe biden have solved problems before. that's a hopeful sign. that there's a willing partner he can trust at the table. but the fact that you know you can get to point where people don't even have a counteroffer obviously is frustrating and it's really neither side should look to the american people like they're giving up until the very last minute. >> a.b. stoddard, thank you very much. we always appreciate your insight. >> there may be bickering on capitol hill about the fiscal cliff, but outside of washington, americans want

something done and yes, they want it done now. and the oak ridge boys have been crooning for the ailing president, george h. bush and someone who was there will join us to tell us how it went. hey, look! a shooting star!

make a wish! i wish we could lie here forever. i wish this test drive was over, so we could head back to the dealership. [ male announcer ] it's practically yours. test drive! but we still need your signature. volkswagen sign then drive is back. and it's never been easier to get a jetta. that's the power of german engineering. get $0 down, $0 due at signing, $0 deposit, and $0 first month's payment on any new volkswagen. visit vwdealer.com today.